Happy Monday. Here’s what we’ve got today…

• A look at Lightspeed Venture Partners’ planned expansion into buyouts

• The deal sheet, plus the outlook for troubled U.S. regional lenders

Lightspeed Venture Partners has hired Elliott Management’s Isaac Kim to lead an expansion into technology-focused buyout investments, as first reported by Bloomberg.

Kim is a Menlo Park-based senior managing director with a nearly nine-year tenure at Paul Singer’s firm. Following his departure, Kim is completing a period of ‘gardening leave’ before formally starting with Lightspeed.

While Elliott is best known for its public activist campaigns, much of Kim’s work focused on buyout-oriented transactions, often in partnership with other sponsors. Notable deals include Elliott’s $16.5 billion Citrix take-private with Vista Equity Partners and its $16 billion acquisition of Nielsen alongside Brookfield.

Kim also held a seat on Athenahealth’s board, acquired by Elliott and Veritas Capital for $5.7 billion after a contentious activist campaign. In a post-mortem conversation with The New Yorker, Athenahealth’s founder and then-CEO Jonathan Bush described his research after Elliott’s approach as akin to “Googling this thing on your arm and it says, ‘You’re going to die.’”

Media coverage of details from Bush’s divorce a decade earlier appeared shortly after Elliott’s first public bid for Athena. Elliott denies involvement, though Bush and his ex-wife Sarah Selden believe the timing was not coincidental.

“You want Jonathan out as a CEO and you can’t find enough on him in the workplace, which is the only thing that should be relevant, so you dig this out—something that had nothing to do with work, and plaster it all over the tabloids?” said Selden. “I felt like our family was used for financial gain … we were a pawn.”

Lightspeed’s Private Equity Launch

Lightspeed’s approach is likely to be decidedly more tame—perhaps more closely aligning with the first nine years of Kim’s investment career, when he focused on software deals with Golden Gate Capital.

Lightspeed has not yet announced a dedicated buyout fund or publicly outlined its plans for more mature investments. The strategy does, however, mirror moves made in recent years by other early-stage firms looking to move beyond their core competency. Obvious benefits include an expansion of assets under management and some diversification away from potentially cyclical venture investing.

Such moves typically lead to growth-oriented buyout strategies, also known as ‘growth buyout.’ Target industries and verticals generally match firms’ existing early-stage efforts.

In 2022, Bessemer Venture Partners raised $780 million for a new platform known as BVP Forge, a growth-oriented buyout strategy targeting acquisitions with an enterprise value of up to $300 million.

Later that year, General Atlantic hired veteran Silver Lake investor Jonathan Durham to lead its own technology buyouts group. The firm has since acquired infrastructure investor Actis and credit platform Iron Park Capital Partners, possibly in preparation for an upcoming IPO (for which it confidentially filed in December 2023).

While late-stage expansions may be gaining in popularity, it’s not an entirely new occurrence. Industry Ventures raised a dedicated tech buyout fund in 2020, and Frazier Healthcare Partners raised its first healthcare growth buyout fund in 2016.

• EQT Corp. (NYSE: EQT) agreed to acquire Equitrans Midstream Corporation (NYSE: ETRN), which EQT had divested in 2018, for $5.4 billion in an all-stock deal.

• TPG is in talks with Partners Group over a potential acquisition of Techem, a German energy service provider, that could fetch around €6 billion.

• Partners Group is considering a sale of VSB Group, a wind and solar producer, that could be worth around $2 billion.

• BlackRock agreed to acquire SpiderRock Advisers, a $4.8 billion AUM wealth management firm.

• UWorld, a provider of exam preparation materials, acquired Aspen Publishing, an educational content and digital learning services company, from Transom Capital Group.

• Choice Hotels International (NYSE: CHH) has abandoned its $7.8 billion hostile takeover bid for Wyndham Hotels & Resorts (NYSE: WH).

• The family of Hans Georg Näder, the controlling shareholder of Ottobock, is in talks with EQT over a potential deal for the Swedish private equity firm’s 20 percent stake in the German prosthetics company, which could be valued at €1.1 billion.

• Audi has agreed to acquire a 100 percent stake in Sauber's Formula One team as it prepares to enter the competition.

• BlueGrace Logistics, a Warburg Pincus-backed transportation management and logistics services provider, acquired Evos Smart Tools, a logistics-focused SaaS optimization platform.

• Sixth Street, Silver Lake, L Catterton, Ares Management, and HPS Investment Partners provided $1.8 billion in new money to Equinox, a luxury fitness club operator, to refinance existing debt and support growth.

• Frontenac has formed a new platform known as Navis Food Partners to consolidate independent food service distribution companies in the Northeastern United States.

• Hillhouse Capital, Boyu Capital, and CDH Investments are in advanced talks to invest in the non-China data centers unit of GDS Holdings Ltd, a Chinese data center operator.

• PAI Partners is considering a sale of Marcolin, an Italian eyewear manufacturer, with Kering, EssilorLuxottica, Safilo, and Marchon among potential suitors.

• SPIE Group agreed to acquire ICG Group, a German provider of digital communication infrastructure solutions, from H.I.G. Capital.

• Reddit set terms for its IPO today, offering 22 million shares at $31 - $34, or a fully diluted valuation of up to $6.4 billion.

• eToro, a retail stock trading platform, is considering a U.S. or U.K. IPO that could value the business at more than $3.5 billion.

Tech, Vertical SaaS, & Misc. Enterprise

• Wiz, an Israeli cloud security company, is in talks to raise $800 million at a valuation of more than $10 billion from Thrive, Lightspeed, G Squared, Sequoia, and Cyberstarts.

Fintech

• Griffin, a Banking as a Service startup specializing in modular banking solutions for fintechs, raised $24 million. MassMutual Ventures, NordicNinja, and Breega led, with participation from Notion Capital and EQT Ventures.

• Baanx, a London-based cryptocurrency payment provider, raised $20 million in Series A funding from Tezos, Chiron, and the British Business Bank.

• Utila, a developer of an institutional operations platform for digital assets, raised $11.5 million in seed funding led by NFX, with participation from Wing VC, Framework Ventures, Fasanara Digital Ventures, North Island Ventures, Republic Capital, Liquid2, Inspired Capital, Lyric Ventures, DCG Expeditions, Launchpad Capital, Shima Capital, K5 Global, Big Brain Holdings, and Impatient.

• Sonarverse, a provider of crypto data infrastructure, raised $7 million in seed funding led by BlockTower Capital, with participation from United Overseas Bank, Aglaé Ventures, Third Prime, Ocular, Aptos, FBG, and FJ Labs.

Healthcare & Life Sciences

• Biobot, a developer of image-guided surgery systems, raised $24 million in Series B funding led by Tony Tan, with participation from ZIG Ventures.

• DocNow, a developer of EHR and wound care tools for post-acute care providers, raised $2.5 million from Waterline Ventures.

• UP Ventures is raising up to $230 million for its latest fund.

• Next Ventures is raising up to $100 million for its latest fund.

1. The latest on a challenged regional bank outlook.

• Roughly one year after SVB’s collapse, Semafor looks at what’s next for regional lenders in the wake of NYCB’s rescue. — Semafor

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